EAA Insurance Solutions: Think You’re Insured Flying an Aircraft You Don’t Own?

March 23, 2016 - So you go into the flight school at your airport to inquire about renting an airplane. The manager goes over the list of available aircraft and the rental rates. He also explains how their checkout for each aircraft works and he mentions you will need to sign a form that states you will be responsible for the insurance deductible, which is $2,500, in the event you damage the airplane. Next, the manager checks your medical and last flight review in your logbook. Finally, the manager pulls out the flight schedule to find a convenient time for you to complete the checkout in the aircraft with one of their instructors. You ask if the flight school has insurance for you to rent airplanes and the manager assures you they have insurance for the rental of their aircraft. All this seems pretty normal, right? As the saying goes, what you don’t know may hurt you!

When the flight school manager told you the flight school has insurance for the rental of their aircraft he was not lying. What the manager did not mention was that their insurance covers the flight school but it does not cover you!

Anytime you use an aircraft you do not own you may very well be completely “naked,” or not covered by insurance. Aircraft insurance policies for non-commercial uses sometimes extend insurance to permissive approved users but that is certainly not the case with commercial aircraft insurance; and while some commercial aircraft insurance policies extend a minimal amount of liability insurance for renter pilots, this insurance is usually limited to $100,000 and does not cover damage to the aircraft. Furthermore, insurance companies are pretty aggressive when it comes to recovering from renter pilots for the cost of those repairs they do pay for under the flight school insurance policy - that’s the target on your back!  That form you signed for the flight school is just aimed at helping the flight school recover their deductible and has nothing to do with what their insurance company may seek to recover from you.

Sorry about the scare tactic, but this stuff is real and you need to be aware of the risks and how to protect yourself.

So how do you protect yourself when you are using an aircraft you don’t own? Our recommendation is that you obtain a non-owned aircraft insurance policy. These policies are not terribly expensive, especially when you consider the protection you get versus the risk.

There are essentially two parts to a non-owned aircraft insurance policy. The first part is liability insurance in case you injure someone (including death), or damage someone’s property, other than the aircraft you are using. Typically, the limit of insurance is $1,000,000 per occurrence subject to $100,000 per passenger. (Note: make sure you avoid any insurance policy that uses a “per person” limit because it will substantially reduce your protection!)

The second part of the insurance policy is liability insurance for damage to the aircraft. You can buy whatever limit of insurance you wish; however, it is recommended that you obtain at least an amount equal to 50 percent of the value of the non-owned airplane. You may, of course, purchase a higher limit of insurance but that’s up to you.

Non-owned aircraft insurance can be purchased for standard category aircraft, light sport, and experimental, including single-engine and multi-engine aircraft; gliders or sailplanes; seaplanes; helicopters; and gyrocopters. The price of this insurance will depend on the type of aircraft you need insurance to fly.

Assuming you are protected by someone else’s insurance is a bad idea. Making sure you have the right insurance at the best price is what EAA Insurance Solutions and the EAA Non-Owned Aircraft Insurance Plan is all about. This EAA member benefit is exclusively administered by Falcon Insurance Agency Inc. and that’s where you should go if you need insurance to protect yourself when you fly an aircraft you do not own.

As an EAA member you have exclusive access to a great resource with EAA Insurance Solutions. Call 866-647-4322 and talk directly to an aviation insurance professional, or to checkout your options for non-owned aircraft insurance, visit the EAA Insurance Solutions web page. With EAA Insurance Solutions you will find the right insurance at the best price!

Bob Mackey is senior vice president with Falcon Insurance Agency, the official administrators of EAA Insurance Solutions. If you have any comments about this article or if would like to see a specific aviation insurance topic addressed in a future article, send him an e-mail.